by: Jeff Lear, Lear Communications LLC

Inova Health System CEO Knox Singleton spoke about factors driving change in the healthcare industry to ACG National Capital’s January meeting.

After an introduction by Michael Farber from event sponsor Booz Allen Hamilton, Mr. Singleton told the members that the industry as a whole is in a place that he hasn’t seen before in his 40 years of experience. The high degree of uncertainty makes shifts very hard to predict; from the pending Supreme Court ruling on healthcare reform to the ongoing revolution in treatments and research brought about by new medicines, tools and bioinformatic data management.

One of the few certainties in today’s healthcare system is that the economics are not working at just about every level. While clear forecasts may be hard to come by, he described three forces currently affecting healthcare and offered his insights on where they might lead the industry in the next few years.

Mr. Singleton noted that the aging of the American population is creating a greater demand for treatments. The fastest growing segment of the population is the 85+ age bracket, and they spend significantly higher amounts on healthcare than younger groups. He also pointed out that family dynamics are causing some urban populations to age more rapidly. In our area, he explained that the population is aging ahead of the national average because elderly parents move here to be near children who need to continue with their careers as they step into the role of caregivers. Overall, he suggested that even if unit costs remain stable, the increasing volume could cripple the current Medicare system.

Next, Inova’s CEO talked about how the healthcare reform law might affect the industry, assuming that the exchange concept is not overturned by the Supreme Court. He expects that the exchanges would lead most small to mid-size employers to get out of the business of providing healthcare to employees. He likened the exchange system to the Western European model of healthcare that he experienced during a fellowship opportunity after graduate school. That system would typically overpromise and underfund healthcare, leading to long waits for non-emergency procedures. The delays would drive those who could afford it to purchase private coverage that would provide another tier of service beyond that available to those in the exchanges.

He also suggested that the reform law as enacted would lead to reductions in payments to doctors and hospitals, with an ensuing consolidation among physician practices and medical centers. Among doctors, Mr. Singleton feels that older practitioners will retire, those who continue to work will look to form into practice groups, and the doctors fresh out of school will be looking join those practice groups. He predicts that free-standing hospitals may cease to exist within five years, as the economics of the business will require those institutions to join a healthcare system or shut down.

Lastly, the Inova executive focused on changes in the science of medicine that will lead to significantly different processes for research and treatment. He described how our understanding of the human genome has significantly improved the healthcare industry’s ability to predict individual medical problems and either prevent them or detect them early. As the research moves forward, more and more patients receive care customized to their body’s ability to respond. Physicians can look at the genomic receptors in a patient to determine what course of treatment will activate that person’s defenses against a particular disease. As for the research itself, he pointed out that long trials on humans may not be as critical in the near future, as tests can be performed on collections of tissue samples to predict how the human body will respond.

Mr. Singleton closed with a look at the growth of Inova Health System, from an idea formed around a dining room table in the late 1970’s to a nationally recognized regional health system today. He attributed the system’s success to leadership in medical service and personalized medicine, a fully integrated and comprehensive health care delivery model, and a commitment to education and clinical research.

Please join us for our next monthly meeting on Friday, February 17, when our speaker will be William Varner, President & Chief Operating Officer, ManTech Mission, Cyber & Technology Solutions Group.